Hamilton

Mustard Seed Co-op fighting falling sales with 6-step plan to keep its doors open

Staff at the Mustard Seed Co-op have developed a plan to keep its doors open in the face of falling sales and hundreds of thousands of dollars in debt.

'They have the best yogurt in town ... and the best fall apples,' says Coun. Wilson

A woman walks past the Mustard Seed on July 3, 2019. The cooperative community grocery store has launched a six-step sustainability plan aimed at keeping its doors open. (Dan Taekema/CBC)

Mustard Seed Co-op has developed a plan to keep its doors open in the face of falling sales and hundreds of thousands of dollars of debt.

That six-step plan was discussed during a special members meeting on June 24, according to the store's operations manager Stacey Allen-Cillis, who said the gathering saw the largest turnout since the co-op opened.

"We need our members to help us keep the doors [open]," she explained. "The membership heard us and they're more than happy to see us become completely sustainable."

The state of the co-op came to light in part thanks to a Reddit post titled "The Mustard Seed is on the brink of shutting down."

It included excepts from an email from the co-op to members, including reference to $23,000 less in grocery sales for the year, compared to 2018, and that the most recent audit of the co-op's finances found it was at risk of not being able to continue.

The post also stated the Mustard Seed owes approximately $400,000 to individual members who loaned it the funds to open.

Allen-Cillis said the co-op is aware of the Reddit post, but noted the information it shared was "confidential" and meant for members only.

She said all grocery stores struggle with decreased sales due to factors such as food prices and trends.

"It's not specific to the co-op," Allen-Cillis explained. "The [$23,000] number may be specific to the co-op but the overall sense of decreased sales in grocery retail in general is accurate."

Focus on local, healthy food

The operations manager suggested many of the misconceptions about co-ops, including the reason for the higher price tags on some products, come from a lack of understanding about the things that make it unique.

A co-op may lack of buying power compared to large-scale franchises, but it can focus on things like offering employees a living wage, supporting local business and producing less waste.

"We're doing our best to make sure we're paying our producers, our small-scale farmers trying to feed their family, a fair asking price," said Allen-Cillis.

The co-op, which welcomes both members and non-members to shop, opened in 2014 and offers a different option for those who want to buy locally grown, healthy foods.

Then-premier Kathleen Wynne toured the co-op in 2017, accompanied by former MPP Ted McMeekin and Mayor Fred Eisenberger. (Laura Clementson/CBC)

Coun. Maureen Wilson, whose ward includes the store, has sat on its board in the past and says her family are still members there.

She said questions about the co-op's viability have been raised several times over the past few years, with the board repeatedly asking members to shop there more often.

That said, in an urbanized world where people are far from the farms that produce the food they eat, the councillor said supporting something like the co-op and the opportunities it offers smaller entrepreneurs to break into the food business are more important than ever.

Plus, "they have the best yogurt in town and tofu and the best fall apples," Wilson added.

Ward 1 Coun. Maureen Wilson says she's a member of the co-op. (Samantha Craggs/CBC)

The co-op was only able to start up thanks to help from "excited folks who were more than happy to offer us a loan" and other "outside help" in the form of donors, according to Allen-Cillis.

That's where the $400,000 figure comes from.

"We have to repay them, thus when sales go down our loans and debt is the same we have to find a way to offset that," she added. All we're trying to do is be responsible with what we signed up or and pay back those loans and the people who believed in us."

'I really wish more people would ... give us a try'

At a recent meeting, the noteholders agreed to a plan to restructure their dept to help the co-op remain viable, said Allen-Cillis, adding that restructuring was "absolutely, voluntarily done."

She declined to go into further detail about the co-op's plan, citing a need to send more information out to members and survey them for their response, but did confirm two aspects.

Previously, people would pay a one-time fee of $100, which would make them lifetime members. Under the new plan all members, including those who bought it when it began, will pay $4.25 every month for a total membership fee of $50 each year.

The decision to restructure the membership model is "not uncommon" for a co-op, said Allen-Cillis.

One member also proposed eliminating the two per cent co-op credit from members, but that's something the operations manager said will be left up to each individual.

"The people that sincerely believe in this model and what we do and are able to provide have spoke and they are 100 per cent backing what we're trying to do," said Allen-Cillis.

"It's such an amazing system. I really wish more people would come in and give us a try."